To date, most biochemical approaches to unravel protein function have focused on purified proteins in vitro. Whereas they analyze enzyme performance under assay conditions, they do not necessarily tell us what is relevant within a living cell. Ideally, cellular functions should be examined in situ. In particular, association/dissociation reactions are ubiquitous, but so far there is no standard technique permitting online analysis of these processes in vivo. Featuring single-molecule sensitivity combined with intrinsic averaging, fluorescence correlation spectroscopy is a minimally invasive technique ideally suited to monitor proteins. Moreover, endogenous fluorescence-based assays can be established by genetically encoding fusions of autofluorescent proteins and cellular proteins, thus avoiding the disadvantages of in vitro protein labeling and subsequent delivery to cells. Here, we present an in vivo protease assay as a model system: Green and red autofluorescent proteins were connected by Caspase-3- sensitive and insensitive protein linkers to create double-labeled protease substrates. Then, dual-color fluorescence cross-correlation spectroscopy was employed to study the protease reaction in situ. Allowing assessment of multiple dynamic parameters simultaneously, this method provided internal calibration and improved experimental resolution for quantifying protein stability. This approach, which is easily extended to reversible protein-protein interactions, seems very promising for elucidating intracellular protein functions.